Tag Archives: Atlantic City

Agony Over the Property Tax Cap

At the New Jersey  League of Municipalities convention to be held in Atlantic City tomorrow officials will be focused on a central problem, “How are we going to run our towns while keeping property tax growth below 2 percent?” The new cap is part of Governor Christie’s “tool kit” to reform local spending.

Will the cap work to reform local government spending? The true problem in New Jersey is not necessarily the state’s large number of small municipalities. In the 1950s, New Jersey had the same number of local governments. Schools were financed with local revenues. What has changed in the interim? The amount of things that state and local governments do, who provides these services, and how they are financed.

Since the 1960s, the rise of the public sector union, state and federal aid to local governments, court decisions on education financing, state mandates, environmental and business regulations have already achieved a level of ‘fiscal centralization,’ by planting a state and federal spending agenda in municipalities. The challenge of local spending reform is first to recognize the degree to which governments are entangled. The funding for locally provided goods, like education, are centralized through state and federal mandates, regulations, and state financing formulas.

Pulling back the curtain on fare hikes: New Jersey Transit’s tradeoffs

New Jersey Transit is facing a $300 million shortfall. Governor Christie plans to withhold $33 million in subsidies to help close New Jersey’s $2.2 billion budget gap. The transit agency’s response is bitter medicine for customers. Riders can expect a 2o to 30 percent fare hike.

In addition, the agency has laid off 200 people (about 2 percent of its workforce). This represents the, “deepest one-year workforce reduction in the agency’s 30 year history.” The reason it is such a drastic cut has more to do with recent history. In the past three years, transit payroll  increased 24 percent between 2006 and 2009. Crunching payroll numbers, The Asbury Park Press finds that in this three year period, the number of employees increased by 14 percent, and average total pay (including overtime) rose from $57,474 to $62,794.

Management salaries will be cut by 5 percent, for Executive Director James Weinstein, who makes $261,324 a year, the reduction will amount to a little over $13,000.

For riders who suppose the stimulus will be used as as a fare subsidy replacement. It’s too late. The money’s been earmarked.

New Jersey Transit’s $52 million stimulus funds will be used for special projects, including: $15 million to improve pedestrian walkways at Newark Penn Station, and $36 million for a new “intermodal station and parking facility” in Pennsauken, Camden County to allow light rail transfers to the Atlantic City commuter rail and bus service.

Record-breaking Property Tax Appeals in New Jersey

New Jersey residents are taking their property tax bills to City Hall. In Essex County, property tax appeals doubled to 6,487 and in Ocean County appeals have tripled to 14,129. “I’ve been in the industry 35 years, and it’s a record,” claims Ocean County’s tax administrator.

According to The Star Ledger, it’s so worrisome, the NJ League of Municipalities will be taking it up at their meeting in Atlantic City this month in a session entitled, “Strategies for Defending the Tax Base Without Wiping Our Your Budget.”

In appeals the town must defend its property assessments with the burden of proof placed on the homeowner. When residents win their case, it means less revenue for the town. One thousand successful appeals in Montclair mean a $1 million hole the budget.

While tax rates have increased in many communities, reassessments also drive swings in property tax burdens. Trenton requires a reassessment every five years – though this isn’t always enforced. After 42 years, Newark underwent a property tax reassessment in 2003. In the 1970s, members of Newark’s City Council including former Mayor Sharpe James were arrested for refusing to institute a reevaluation. While reassessments are never popular, the longer municipalities go without a reassessment the bigger the sticker shock.

What’s driving the record number of appeals across the state is a combination of factors. Increasing rates, reassessments, and bad economy cutting into people’s ability to pay. In some cases, a reassessment is good news for the taxpayer. At the high end of the housing market, values have come down, leaving some with a lower bill.  In Livingston, N.J.  the average homeowner has seen a property bill reduction. But this didn’t make one Florida-bound resident happy, “Overcharged for the first 8 years I lived here.

Assorted Links

Evidence from Germany: When the federal government bails out state governments, unsound fiscal policies emerge.

Tax Less but Spend More in Millburn, N.J. “Taxes have grown with people’s expectations of what local government should provide.” (The average homeowner pays $18,195 in property taxes.)

“No revenues left to share.” Rhode Island likely to cut funds to local governments again.

Against the tide: Atlantic City to expand outlet mall, “The Walk” with a $9 million loan from the Casino Reinvestment Development Authority.

Tax District forming  in NOVA to extend DC Metro to Dulles Airport; Fairfax, VA will pitch in $90 million.

Mayors of Hoboken and Secaucus taken into police custody

The New York Times reports that a major FBI sting operation is currently taking place across New Jersey.  The mayors of Hoboken and Secaucus are a few of the elected officials currently in custody at FBI headquarters in Newark. The probe centers on charges of money laundering and political bid rigging.

According to the New Jersey Star-Ledger:

Assemblyman Daniel Van Pelt (R-Ocean), Hoboken Mayor Peter Cammarano, Secaucus Mayor Denis Elwell and Jersey City Council President Mariano Vega are among those who have been already been brought to the FBI building in Newark. Jersey City Deputy Mayor Leona Beldini has also been arrested. A total of 30 people have been taken into custody, officials said.

The corruption centers on, “an international money laundering and corruption probe that includes rabbis in the Syrian Jewish communities in Deal and Brooklyn.”

Other sweeps are taking place in Ocean, Monmouth, Hudson, and Bergen counties.

The sweep follows last year’s arrest, prosecution, and conviction of former Newark Mayor Sharpe James, who is currently serving a 27 month sentence for fraud and conspiracy. And there was also the arrest of 11 elected officials in 2007 on bribery charges. The mayor of Atlantic City briefly disappeared last year pending a corruption probe.

Here’s the Star-Ledger‘s rundown of recent corruption probes and scandals throughout the state.

More on this subject as it develops.